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Money to burn: Study finds fire-prevention incentives in Indonesia don’t work

Fires break out behind locals' houses in the Kembung Baru village, Riau province, Indonesia. Image by Suryadi/Mongabay Indonesia.

  • Villages in Indonesian Borneo that were offered financial incentives to not burn their land for farming were just as likely to continue setting fires as villages that received no financial assistance.
  • That’s the finding in a new study that concludes that without an alternative land-clearing method that’s as cost-effective as burning, rural communities will continue to set fire to forests to make way for agricultural land.
  • The researchers suggested several factors might explain the findings, including the size of the incentive, individual villagers’ wariness that the money would trickle down to them, and the perception that burning is still the cheapest way to add value to the land.
  • The researchers also say there’s a poor understanding of the fire problem among policymakers in Indonesia, who tend to overlook the economic drivers of the practice and think that tougher penalties and bans will suffice to end it.

JAKARTA — Paying villages in Indonesia to ensure they don’t burn their land for farming appears to have little to no effect on reducing fires, researchers have found.

The implication is that without an alternative land-clearing method that’s cheaper, the use of fires to clear land may continue to be widely practiced across Indonesia for the foreseeable future, destroying what’s left of the country’s forests.

The large-scale randomized controlled trial was carried out in 75 fire-prone villages in the Bornean province of West Kalimantan in 2018. The team of researchers, from Stanford University, Australian National University and the Indonesian government’s National Team for the Acceleration of Poverty Reduction (TNP2K), paid 10 million rupiah ($750 at the time of the trial) to each village up front to help with fire-prevention efforts.

If the villages were able to last the fire season without any fires in their areas, they would receive another 150 million rupiah ($10,800), equivalent to around 15% of the average village budget for the year.

The project is among the first to test whether conditional cash payments to villages can be successful in curtailing land-clearing fires.

To measure whether the financial incentives had real effect on any reduction of fires in the villages, the researchers monitored 200 other villages as a control group, in which they received no financial assistance. They then remotely monitored incidences of fire using satellite imagery.

The results showed that 21 of the 75 incentivized villages, or 28%, managed to go fire-free for the entire 2018 dry season. While the figure appeared to be impressive initially, it was almost exactly the same as the 29% of villages in the control group villages that also experienced no fires.

The researchers concluded that the probability and extent of fire incidents are indistinguishable between villages where fire-prevention incentives are in place and those without. They also noted that the distribution of fire hotspots in the two groups were remarkably similar.

“Without a credible counterfactual comparison group, one might have concluded that the program delivered reductions in ­fire when the 21 successful villages are precisely as many as we would expect without the program,” the researchers wrote in the paper.

“The adoption of fi­re prevention practices was insufficient to deliver the fi­re free outcomes desired,” they added. “Neither was paying explicitly for them.”

Walter P. Falcon, a professor of agricultural policy and economics at Stanford University and co-author of the study, said this came as a surprise for the researchers.

“The first [major surprise] was the complete non-response to the conditional payment,” he told Mongabay. “We had thought the incentive effect would be moderately high, but alas, it was not.”

Locals prepare tools for rewetting smoldering peatlands in Air Hitam subdistrict, Riau province, Indonesia. Image by Suryadi/ Mongabay Indonesi

The most likely reason is a simple one: The payment might simply not have been large enough.

It turned out that the 150 million rupiah incentive couldn’t compete with the practicality and the low cost of fire as well as the high value of the land being cleared, the researchers speculated.

They found that fire was the only way in which land was cleared in nine out of 10 villages; burning has long been the most practical and cheapest method to clear forest area into agricultural land for oil palm, rubber, and other crops. It’s also estimated to be one-third the cost mechanical clearing — using tractors and other heavy equipment — coming in at between $200 and $595 per hectare.

This adds value to the cultivated land, and implies that as long as there’s still land available to be cleared, then the burning won’t stop, according to the villagers.

“The net present value of cleared land was/is very high relative to burning costs, and that this economic temptation dominated social concerns for a relatively small number of households,” Falcon said.

The researchers noted that burning and planting was also an indirect way to garner claims on land, with people likely placing a high value on de facto property rights in the absence of de jure rights.

The use of fire was also prevalent on peatland, something which the researchers attributed to the widespread assumption that the use of fire could reduce the peat soil’s acidity and generate useful plant nutrients.

The researchers noted that while that might be true for mineral soils, it didn’t apply to peat soils.

“Our evidence is anecdotal. However, the point came up often enough in conversations to suggest that there is still a fairly widespread belief that burning improves soil nutrients, even on peat soils,” Falcon said. “The latter is a very doubtful proposition.”

Even if payments were large enough, the program might still have no significant impact in reducing fires as it’s hard to convince a whole village to act in a collective manner, in this case refraining from practicing slash-and-burn clearing.

A villager might have felt that a payment to the village government would not benefi­t them directly, or corruption in village government might create disincentives to adhere to the program.

“The private gain — for a few or even just one — would outweigh their view of the communal gain for themselves and the village,” the researchers wrote. “Since the program objective was no fi­re, one defector from the whole village [around 320 households] is all it takes to be unsuccessful.”

And the experiment found that was indeed the case, with only a small number of households, 1% of an average of 400 households in a village, practicing slash-and-burn clearing.

That also means that the common perception that most villagers are casually setting fires appears to be a misperception.

“We were genuinely surprised, and believe others were too, at the relatively small number of households seemingly engaged [at least in 2018] with fire setting,” Falcon said. “Because there are so many fires, especially in El Niño years, I think there is widespread belief that lots of households are setting them.  Too few people have done the basic arithmetic on fire setting and this is unfortunate.”

But the cash transfer wasn’t without its benefits. The researchers found that the $750 upfront payment was used by the villages for fire-fighting purposes.

According to the study, incentivized villages were 20% more likely to have a fire-prevention task force; there were also large increases in the number of task force groups within villages, in the number of villagers participating in fire patrols, and in the frequency with which forest patrols were undertaken.

But these increases in fire-preventive measures didn’t have a significant impact on reducing fire incidents.

“This is an unexplained paradox to us,” Falcon said. “The mere formation of a fire brigades does not necessarily mean that they are effective in mitigating major fires. My guess is that a larger sample size would have helped to clarify this point.”

The researchers say developing an affordable alternative to slash-and-burn practices — one that is more cost effective and yields better result for villagers — is key to reducing the use of fire in land clearing. Falcon said this isn’t widely understood by public officials in Indonesia.

“We found substantial variations in views on land clearing costs,” he said. “Some leaders failed to grasp the underlying economics of land clearing, and thought that the way forward was tougher penalties and bans. Others had rather utopian views [on] how villages/plantations might work together. A few talked about the feasibility of land-clearing-machinery rental stations. Except for the growing recognition of preventing fires on peatlands, however, we were not encouraged by new programmatic approaches to fire curtailment that had good prospects for delivering at scale.”

Citation:

Edwards, R. B., Falcon, W. P., Hadiwidjaja, G., Higgins, M. M., Naylor, R. L., & Sumarto, S. (2020). Fight fire with finance: A randomized field experiment to curtail land-clearing fire in Indonesia (55-e/2020). Retrieved from TNP2K website: http://tnp2k.go.id/download/17936WP55%20FightfireR2.pdf

 

Banner image: Fires break out behind locals’ houses in the Kembung Baru village, Riau province, Indonesia. Image by Suryadi/Mongabay Indonesia.

 

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